No win, no fee ambulance chasers target tenancy deposit ‘victims’

Letting agents and landlords are being warned of an increasing number of ‘ambulance chasers’ seeking ‘no win, no fee’ tenancy deposit claims.

The warning comes after a growing number of information requests to tenancy deposit schemes from claims management companies who, on behalf of tenants, are targeting landlords who may not have protected deposits properly, or given the correct Prescribed Information.

The issue, which we have highlighted before, was aired on Friday on BBC Radio 4’s You and Yours programme.

Carolyn Uphill, chairman of the National Landlords Association, warned landlords to ensure that they have fully complied with tenancy deposit protection law.

She said claims companies seem to be inviting tenants who have not received their Prescribed Information to make a claim even if the deposit is protected.

Uphill said: “You have to ask where the financial loss for the tenant is. The majority of tenants’ deposits are being protected and 99% of tenancies end without any issues over the return of the deposit.

“Where problems do arise, the tenant has access to a free and impartial decision using the scheme’s dispute resolution service.

“Of course, where there is blatant disregard for the law, landlords can have no argument and must be brought to rights.

“However, these claims firms are looking to exploit those landlords who have protected their tenants’ deposits but may not have properly issued the Prescribed Information.

“In practice this could simply mean not providing their tenant with a leaflet about where the deposit is protected.

“This sort of action is morally questionable and unnecessarily punitive, and will only work to undermine the good relationship that exists between the majority of landlords and their tenants.”

Eddie Hooker, CEO of Mydeposits, the tenancy deposit scheme owned by the NLA, said: “It has always been the landlord’s responsibility to protect the deposit and a vital part of the process is to pass the Prescribed Information on to the tenant. Landlords must be aware that they are ultimately responsible even if they use a letting agent.

“Our advice is to check with the agent or directly with the deposit protection scheme to ensure all of the deposits have been properly protected.

“Those who fail to comply with either step of the legislation leave themselves open to potential fines of up to three times the deposit value and could fall prey to these kinds of claims companies.”